9 ms·

How the IBM PC Won, Then Lost, the Personal Computer Market

99 points by headalgorithm 5y ago

okareaman 5y ago
PC clones killed IBM in the PC market, which matches how I remember it > Both Microsoft and Intel made a fortune selling IBM’s competitors the same products they sold to IBM. Rivals figured out that IBM had set the de facto technical standards for PCs, so they developed compatible versions they could bring to market more quickly and sell for less.
analog31 5y ago
All in all, I think IBM did mostly the right thing. Given that they published their hardware and software interface standards, they must have expected to be creating a platform as well as a product. They might not have adequately anticipated the resilience of DOS when they tried to come out with OS/2.
- MrRadar 5y ago
  They definitely underestimated the market's requirements for DOS compatibility. Microsoft in contrast understood that which is why Windows (though technically inferior to OS/2 in many respects, at least until Windows 95) ultimately won. The Digital Antiquarian blog has an excellent (if long) series of articles covering the history of Windows from its original conception as a product up through Windows 3.1, including looks at OS/2 and other competing products: https://www.filfre.net/2018/06/doing-windows-part-1-ms-dos-and-its-discontents/ https://www.filfre.net/2018/06/doing-windows-part-1-ms-dos-a...
  - cameldrv 5y ago
    It was technically inferior in many respects, but mostly not ones that mattered. I ran OS/2 2.0 and 2.1 for a while, and it was dog slow and consumed massive amounts of memory compared to Windows. The main selling point of OS/2 was supposed to be that it had preemptive multitasking and protected memory, which was supposed to make it much more stable compared to the (constantly crashing) Windows 3.0/3.1. The problem was that the Workplace Shell (the GUI) had some sort of single message queue that could be blocked by a misbehaving program. This would cause the GUI to hang. While it was true that the system would continue to task switch, and you could even telnet into the machine after this happened, from the console, the system was completely unresponsive, so it was functionally equivalent to the OS crashing. IBM as an organization didn't seem to understand what features were actually relevant to normal users and prioritize them. It could do a bunch of things like smoothly multitasking multiple DOS apps, that were technically impressive but not that important to users.
    - zozbot234 5y ago
      > The problem was that the Workplace Shell (the GUI) had some sort of single message queue that could be blocked by a misbehaving program. This would cause the GUI to hang. Windows 9x had very similar issues, and even early versions in the Windows NT series weren't altogether free of them. The viable fix was to hit CTRL+ALT+DEL and force close the misbehaving application.
      - dmz73 5y ago
        Windows 9x had driver and stability issues but you could always kill an application if it stopped responding. Linux today is similar to OS/2 - the OS keeps working but UI is unresponsive so if you have another computer you can ssh in but if you don't you may have to reboot. I know that sometimes you can switch to terminal using keyboard and try to kill the application from there but that is not as easy as CTRL+ALT+DEL + Task Manager and killing the application. Of course, there are times you don't have the keyboard attcahed (tablets) and then frozen UI is equivalent to the crashed OS. And just to add - these days MS has made Windows much less resilient as misbehaving applications can freeze the UI to the point where CTRL+ALT+DEL and Task Manager do not respond any more so I guess OS/2 has won in the end - two of three most used Desktop OSes emulate the bad UI behavior.
        sumedh 5y ago
        > but you could always kill an application if it stopped responding. Wasnt Windows famous for BSOD?
        pjmlp 5y ago
        Sure, but those were kernel panics, mostly caused by misbehaving drivers. Hence why nowadays all drivers have to be certified, and graphics drivers are again in userspace.
        hyperman1 5y ago
        At the win95 time plenty of BSODs came from microsoft bugs, from userspace accidentally weitingbovervkernel data, or even from running out of resources. You have to remember the barrier between kernel and userspace was very porous, applications had their own address space but e.g. DLLs were projected at identical addresses and shared some resources. Kernel memory was mapped in userspace, if I'm remembering it right. Basically, apps had their own cubicle, not their own apartment.
  - temac 5y ago
    > Windows (though technically inferior to OS/2 in many respects, at least until Windows 95) In many respects maybe, but which aspects matter for success is highly contextual, and some just didn't really matter for the general public. Is the system in protected mode? Does not really matter during that era. What did matter however, was resource consumption. Maybe for speed of legacy programs OS/2 1.x targeting only 286 was not good, compared to even Windows 2.1x which had Windows/386. On the memory front, OS/2 1.1 requested 3MB of RAM. Windows 2.x/386 requested 640kB. Windows 3.1 requested 2MB (or even just 1MB in standard mode). OS.2 2.0 requested 4MB (release date 92). Windows 95 requested 4MB too... So OS/2 was arguably kind of technically inferior to Windows on many other points, and that was the points that were actually important for most people at the time. Windows NT was "far better" (abstracting away e.g. the resources required) than both, but was out of reach of consumer system for years... On the other hand, Mac OS on 68k was quite problematic until its end but it was not what made successes and failures of Mac during that era. The success of Windows was certainly not only about backward compat. It was also about requirements. And price. And add to that, of course, about what was provided by default by nearly all OEMs... Sure OS/2 was with a certain modernist view of things "technically better" than some Windows, but you know what else was even better in 92? A SPARCstation 10 :D
    - flomo 5y ago
      > Windows NT was "far better" than both, but was out of reach of consumer system for years... Microsoft had a far better developer roadmap with "32 bit protected mode with just a recompile." They sandwiched OS/2 v2/3 from the bottom and top. When memory prices dropped, the period when OS/2 had a significant hardware cost advantage over NT was rather short.
  - analog31 5y ago
    In my view, people started developing for DOS, and it became a standard for small scale and casual developers. Even into the Windows era, a lot of utilities ran under DOS, such as early embedded development tools. Programming any Windowed OS was too hard, and we had only been programming for a few years, in relative isolation from one another and beholden to crappy documentation. Especially with tools like Turbo Pascal, writing "software" that looked like commercial software was relatively easy and got the job done. Maintaining and growing any kind of platform becomes a whole new ball game when "what are its specs" is replaced by "will it run my apps?"
- flomo 5y ago
  I believe you are correct. The IBM PC's direct competition was not so much Apple but 'business standard' CP/M Z80/8080 machines from a variety of vendors. Also IBM was under an antitrust decree requiring reasonable and discriminatory licensing, so they didn't have much choice in the matter. Once this was lifted, they went the Microchannel route.
  - TheOtherHobbes 5y ago
    Yes - everyone seems to forget that S-100 CP/M business machines had been around since 1976. It wasn't a huge market, but it definitely wasn't negligible. And there were some home users, although most preferred Apple. So IBM didn't invent the PC. IBM invented mass marketing for its own brand of PC. And also - after a while - IBM started the constant upgrade treadmill. S-100 was more backward looking. You could get 8086 and 68000 cards for S100, but it was really a Z80 ecosystem. There was no clean upgrade path with backward compatibility. This was a showstopper for most businesses, which needed access to old data and software. IBM screwed themselves by hugely overcharging for PS/2, and Compaq stole their lunch. As soon as other clones appeared IBM were out.
    - analog31 5y ago
      Award BIOS was probably a huge game changer. Knowing the contents of BIOS wasn't enough, after Franklin lost their lawsuit with Apple. Someone had to come up with a functional equivalent. A third party BIOS meant that anybody could crank out a machine.
MrRadar 5y ago
No mention of the PS/2 and Micro Channel Architecture? MCA was IBM's attempt to put the genie back in the bottle and redefine the PC back to being something they wholly controlled, and it utterly failed. It also didn't help that they were late to the market with 386-based computers (Compaq having beaten them to the punch with the Deskpro 386) which already signaled they were losing their market leadership position that allowed them to define the PC platform. In response to MCA, the PC industry formed an independent consortium to define the EISA bus and later Intel itself eventually took over as the de facto standards originator for PCs by developing PCI, USB, ATX, ACPI, AC'97/HD Audio, (U)EFI, and a large part of the other foundational standards on which modern PCs are built.
- CurtHagenlocher 5y ago
  PS/2s were overpriced and underpowered, and people I knew told me that a surprisingly high percentage of them arrived DoA. That was basically the end of "no one ever got fired for buying IBM".
- city41 5y ago
  According to this video[1], Compaq's portable also bested IBM. It was Compaq's first product, and everyone thought IBM's upcoming portable would wipe them out, but they held strong and counted on IBM to have production problems, which they did, so Compaq held onto this segment. [1] https://www.youtube.com/watch?v=HEMhpInIACk https://www.youtube.com/watch?v=HEMhpInIACk
  - northwest65 5y ago
    So handy for pirating software at PCCUG meetings.
- D13Fd 5y ago
  They did talk in the article about how slow IBM was to adopt the 386.
  - protomyth 5y ago
CurtHagenlocher 5y ago
"OS/2 finally came out in late 1987, priced at $340, plus $2,000 for additional memory to run it. By then, Windows had been on the market for two years and was proving hugely popular." No. Windows was basically irrelevant until 3.0 came out in 1990.
- midasuni 5y ago
  Yes, it was dos and lotus123 and maybe word perfect that were popular in the 80s.
  - anyfoo 5y ago
    Not contradicting, just adding that MS Word for DOS was also somewhat popular.
  - wombatmobile 5y ago
    Yes. Personal Computers were typewriters and calculators for the first 10 years. That's not to diminish their importance - quite the opposite. The impact changed the world. That's why it took a whole decade. Consider that when the IBM PC was launched, offices the world over had typing pools populated by women whose job it was to type whatever they were given. Spreadsheets changed the world. We went from 1 or 2 types of tuna and 1 or 2 types of olive oil in the supermarket to dozens of each. Why? How? The big enabler was Lotus 1-2-3. Product managers in food companies could manage the ingredients, inventory, branding, marketing and sales performance of dozens of products at a time instead of just one or two. The spreadsheet was a fancy calculator, in the same way that a machine gun is a fancy pistol, and a combine harvester is a fancy hoe. The first decade of personal computers enabled office work to scale, and it reconfigured literacy by enabling individuals to type letters when they felt like it. The fax machine was right there alongside, like the hammer and the sickle of capitalism. The resulting boost to productivity touched every industry the world over.
- SavantIdiot 5y ago
  I'd go so far and say irrelevant until Windows for Workgroups 3.11. That's when Banyan Vines + Ethernet (as opposed to token ring) + Lotus (ccMail & 123) really started to take over corporate America.
Trias11 5y ago
I still remember the nonsense cost of IBM PS/2 i386 for like $14,000-$21,000. IBM approached PC revolution with a dinosauric mainframe mindset and that killed it. For them.
- SavantIdiot 5y ago
  I still remember ~1985 paying $1,000 for 512KB of DRAM from suppliers listed in the back of Computer Shopper. Even clones were very expensive then, but not PS2 expensive.
Liambp 5y ago
If you have any interest in the origins of the personal computer you should track down the sublime documentary series "Triumph of the Nerds" by Bob Cringely. You an find various versions on Youtube.
- laumars 5y ago
  Also I’d recommend ‘Pirates of Silicon Valley’ and ‘Silicon Cowboys’
howmayiannoyyou 5y ago
Lenovo bought IBM's PC business for $1.75 billion in 2004, or about $2.51 billion adjusted for inflation. Lenovo's PC and smart device sales hit a record 12.4 billion in its FY2020, mostly due to Windows-based PCs. I would argue that had IBM ceded software to Microsoft, and had it focused on hardware and PowerPC chip compatibility, the company could have greatly improved on the 20% margins that were the impetus for selling its PC business to Lenovo.
- protomyth 5y ago
  They wanted access to China and Lenovo gave that to them.
blueyes 5y ago
I highly recommend Charles Ferguson's "Computer Wars" on this topic, as well as his other book (about startups and the early Web), "High Stakes, No Prisoners."
FullyFunctional 5y ago
I remember when IBM launched the PC and it looked ludicrously overpriced and lacking in "modern" features (like graphics and sound). I didn't buy one for myself until the 386 came out. The article's claim about "IBM’s strategic error in not retaining rights to the operating system" begs the question if the PC revolution would have happened had Microsoft not owned it. I personally doubt it. While IBM had success up to the IBM AT, there really wasn't much revolutionary about them and they were stupidly expensive. The clones really made the PC a success. It's just tragic that the crap SW and HW won the market.
- jandrese 5y ago
  It's a classic worse is better scenario. https://en.wikipedia.org/wiki/Worse_is_better https://en.wikipedia.org/wiki/Worse_is_better
- flyinghamster 5y ago
  But for short-sightedness at DEC and Xerox, things might have been different indeed. Unfortunately, DEC hamstrung their micros until it was too late, and Xerox's pie-in-the-sky machines at PARC were expensive enough that their real-world offering was the 820, a me-too 8-bit CP/M system that came out just in time to be stomped by the PC.
  - deleted 5y ago
    [deleted]
- AnimalMuppet 5y ago
  > The clones really made the PC a success. Yes. Price competition is a wonderful thing. They undercut IBM's pricing model. IBM tried to get it back with the PS/2, which was patent protected. But that totally missed the point. > It's just tragic that the crap SW and HW won the market. Crap SW and HW made the market. There wasn't much of a market for PCs at the PS/2 price point. There was a much larger market at the PC clone price point. (I'd guess that halving the price led to something like 10 times the volume. The PS/2 was locked out of any meaningful volume just by the price.) General rule: The PC I can afford is better than the PC I can't. Sure, it may be technically inferior. Doesn't matter. The one I can't afford has zero utility for me, so the one I can afford is actually better (for me), no matter how crap it is. The other thing that made that market was the clone vendors cooperating to define the EISA bus standard. It created a huge market (all the clone companies put together) for peripherals. And because you could get anything in an EISA peripheral, that created a huge market for EISA PCs. It was mutually reinforcing to create an exploding market. If they had fought each other with competing bus standards, that would have killed the market.
brian_cunnie 5y ago
I worked at IBM, '91 - '93, in the PC Business, in the sales channel. We had a couple of problems that IBM's competitors didn't have. For one thing, we couldn't make too powerful a PC that might cannibalize the minicomputer sales (AS/400). IBM made much more money on an AS/400 than a PS/2 model 95. Our cost structure was too high. How high? We lost $1 for every $100 we sold. Part of the reason the cost structure was high were the number of IBM'ers: I worked in an office of about 15 people supporting the NY/Long Island region. Four years later, it was down to 1 person. Another reason was our physical costs were high. For example, we couldn't buy RAM from Intel; we had to buy RAM from IBM (which was fabbed in Kingston, NY, not to be confused with the Kingston RAM mfr). Also, we were struggling to get the correct mix of sales channels. For example, we couldn't sell PCs directly through the IBM sales force (too expensive, IIRC it added 36% to the sales cost). Instead, the IBM sales force would partner with dealerships (which added 21% to the sales cost). The web didn't exist yet, not really, so we couldn't sell through there. We could have done direct-response (an 800 number, like Dell & Gateway were doing), but that took a while to spin up. And it was similar in cost to selling through dealerships. Also we didn't sell through distributors, which was the least-expensive channel (16% IIRC). I remember looking at the price list. We had two levels of dealers: those who bought large volumes, which typically purchased equipment at 30% off list, and those who worked in smaller quantities, which would get ~20% off list. As the PC Market became more competitive, we couldn't afford high list prices (we were too expensive), so one of the ways we brought down our list prices was to shrink the discount we gave to the dealers. The dealer was not allowed to sell online or via computer magazines: there had to be in-person contact. That helped prevent the Atlanta dealers from poaching the NYC dealers' business. It's easy to armchair-quarterback the decisions IBM made, but a lot of those decisions were nuanced. For example, you could say, "Why didn't IBM have an 800 number to buy PCs?". And the answer is that a lot of our biggest customers were corporations, not individual consumers, and they felt more comfortable purchasing through a dealer they trusted.
- jandrese 5y ago
  This is a classic case of a business losing a market because they didn't want to let go of a dying but profitable business. The market always wins in the long run. Don't feel sad. This market dynamic is how startups can get ahead. Otherwise everything would be dominated by the huge incumbents forever.
orionblastar 5y ago
Microsoft stabbed IBM in the back with licensing DOS to OEMs and bundling Windows and Office with each OEM PC sold while IBM had OS/2 Microsoft had Windows NT.
sam0x17 5y ago
Side note, there are a LOT of die-hard Thinkpad fans, myself included. Sadly it just hasn't been the same since Lenovo took over. I literally grew up playing Counter-Strike Source with the little red dot.
- kilroy123 5y ago
  Yup, I loved my Thinkpads back in the 2000s. It just never was the same with Lenovo. After 2010, I completely lost interest and moved away to Apple and using a MacBook.
  - sam0x17 5y ago
    I was always running Linux on my thinkpads, and still happily doing so on the latest Asus G14 :)
    - kilroy123 5y ago
      I always ran Linux as well.
- chaoticmass 5y ago
  I've got a smallish collection of old IBM ThinkPads I hold on to (most of them with the matching laptop bag). Models include: 701C, 380XD, 380Z, 600X, 770Z, T42P, T43P, X41t. Running Linux on all of them except the T42P, 380XD, and 380Z. Oddly enough, my current 'laptop' is the Lenovo X1 Tablet, probably the least IBM-like ThinkPad ever (it's like a Microsoft Surface). I just really like the form factor, and unlike the surface, you can take it apart and replace the battery. With thunderbolt, I run an eGPU for light gaming and video editing.
pjmlp 5y ago
No mention that PC clones happened only because IBM could not prevent Compaq's reverse enginneering trick to give birth to PC clones?
graycat 5y ago
Yes, I was in IBM, some AI in their Research Division, from 1985 to 1993 when IBM had a big crash. Maybe an old idea I had about PCs has some insight: The idea is that for several years into the rise of the PC, the base, solid as concrete, fundamental, economic productivity reason for the PC was to kill off the typewriters, that is, word processing; as one guy put it, "capture the key strokes". The typewriters didn't "capture the keystrokes" and, thus, were a huge economic waste. Next in line was spreadsheets. Now the biggie? Okay, replace TVs. We've already essentially replaced newspapers printed on paper; and PDF is replacing a lot of books printed on paper. The future? See a problem that in terms of economic productivity needs solving, and get one or a few PCs and solve it. How? There is nearly no limit on the new problems to be solved or the new means of solution.

99 points by headalgorithm 5y ago

PC clones killed IBM in the PC market, which matches how I remember it > Both Microsoft and Intel made a fortune selling IBM’s competitors the same products they sold to IBM. Rivals figured out that IBM had set the de facto technical standards for PCs, so they developed compatible versions they could bring to market more quickly and sell for less.

analog31 5y ago

All in all, I think IBM did mostly the right thing. Given that they published their hardware and software interface standards, they must have expected to be creating a platform as well as a product. They might not have adequately anticipated the resilience of DOS when they tried to come out with OS/2.

MrRadar 5y ago
They definitely underestimated the market's requirements for DOS compatibility. Microsoft in contrast understood that which is why Windows (though technically inferior to OS/2 in many respects, at least until Windows 95) ultimately won. The Digital Antiquarian blog has an excellent (if long) series of articles covering the history of Windows from its original conception as a product up through Windows 3.1, including looks at OS/2 and other competing products: https://www.filfre.net/2018/06/doing-windows-part-1-ms-dos-and-its-discontents/ https://www.filfre.net/2018/06/doing-windows-part-1-ms-dos-a...
- cameldrv 5y ago
  It was technically inferior in many respects, but mostly not ones that mattered. I ran OS/2 2.0 and 2.1 for a while, and it was dog slow and consumed massive amounts of memory compared to Windows. The main selling point of OS/2 was supposed to be that it had preemptive multitasking and protected memory, which was supposed to make it much more stable compared to the (constantly crashing) Windows 3.0/3.1. The problem was that the Workplace Shell (the GUI) had some sort of single message queue that could be blocked by a misbehaving program. This would cause the GUI to hang. While it was true that the system would continue to task switch, and you could even telnet into the machine after this happened, from the console, the system was completely unresponsive, so it was functionally equivalent to the OS crashing. IBM as an organization didn't seem to understand what features were actually relevant to normal users and prioritize them. It could do a bunch of things like smoothly multitasking multiple DOS apps, that were technically impressive but not that important to users.
  - zozbot234 5y ago
    > The problem was that the Workplace Shell (the GUI) had some sort of single message queue that could be blocked by a misbehaving program. This would cause the GUI to hang. Windows 9x had very similar issues, and even early versions in the Windows NT series weren't altogether free of them. The viable fix was to hit CTRL+ALT+DEL and force close the misbehaving application.
    - dmz73 5y ago
      Windows 9x had driver and stability issues but you could always kill an application if it stopped responding. Linux today is similar to OS/2 - the OS keeps working but UI is unresponsive so if you have another computer you can ssh in but if you don't you may have to reboot. I know that sometimes you can switch to terminal using keyboard and try to kill the application from there but that is not as easy as CTRL+ALT+DEL + Task Manager and killing the application. Of course, there are times you don't have the keyboard attcahed (tablets) and then frozen UI is equivalent to the crashed OS. And just to add - these days MS has made Windows much less resilient as misbehaving applications can freeze the UI to the point where CTRL+ALT+DEL and Task Manager do not respond any more so I guess OS/2 has won in the end - two of three most used Desktop OSes emulate the bad UI behavior.
      - sumedh 5y ago
        > but you could always kill an application if it stopped responding. Wasnt Windows famous for BSOD?
        pjmlp 5y ago
        Sure, but those were kernel panics, mostly caused by misbehaving drivers. Hence why nowadays all drivers have to be certified, and graphics drivers are again in userspace.
        hyperman1 5y ago
        At the win95 time plenty of BSODs came from microsoft bugs, from userspace accidentally weitingbovervkernel data, or even from running out of resources. You have to remember the barrier between kernel and userspace was very porous, applications had their own address space but e.g. DLLs were projected at identical addresses and shared some resources. Kernel memory was mapped in userspace, if I'm remembering it right. Basically, apps had their own cubicle, not their own apartment.
- temac 5y ago
  > Windows (though technically inferior to OS/2 in many respects, at least until Windows 95) In many respects maybe, but which aspects matter for success is highly contextual, and some just didn't really matter for the general public. Is the system in protected mode? Does not really matter during that era. What did matter however, was resource consumption. Maybe for speed of legacy programs OS/2 1.x targeting only 286 was not good, compared to even Windows 2.1x which had Windows/386. On the memory front, OS/2 1.1 requested 3MB of RAM. Windows 2.x/386 requested 640kB. Windows 3.1 requested 2MB (or even just 1MB in standard mode). OS.2 2.0 requested 4MB (release date 92). Windows 95 requested 4MB too... So OS/2 was arguably kind of technically inferior to Windows on many other points, and that was the points that were actually important for most people at the time. Windows NT was "far better" (abstracting away e.g. the resources required) than both, but was out of reach of consumer system for years... On the other hand, Mac OS on 68k was quite problematic until its end but it was not what made successes and failures of Mac during that era. The success of Windows was certainly not only about backward compat. It was also about requirements. And price. And add to that, of course, about what was provided by default by nearly all OEMs... Sure OS/2 was with a certain modernist view of things "technically better" than some Windows, but you know what else was even better in 92? A SPARCstation 10 :D
  - flomo 5y ago
    > Windows NT was "far better" than both, but was out of reach of consumer system for years... Microsoft had a far better developer roadmap with "32 bit protected mode with just a recompile." They sandwiched OS/2 v2/3 from the bottom and top. When memory prices dropped, the period when OS/2 had a significant hardware cost advantage over NT was rather short.
- analog31 5y ago
  In my view, people started developing for DOS, and it became a standard for small scale and casual developers. Even into the Windows era, a lot of utilities ran under DOS, such as early embedded development tools. Programming any Windowed OS was too hard, and we had only been programming for a few years, in relative isolation from one another and beholden to crappy documentation. Especially with tools like Turbo Pascal, writing "software" that looked like commercial software was relatively easy and got the job done. Maintaining and growing any kind of platform becomes a whole new ball game when "what are its specs" is replaced by "will it run my apps?"
flomo 5y ago
I believe you are correct. The IBM PC's direct competition was not so much Apple but 'business standard' CP/M Z80/8080 machines from a variety of vendors. Also IBM was under an antitrust decree requiring reasonable and discriminatory licensing, so they didn't have much choice in the matter. Once this was lifted, they went the Microchannel route.
- TheOtherHobbes 5y ago
  Yes - everyone seems to forget that S-100 CP/M business machines had been around since 1976. It wasn't a huge market, but it definitely wasn't negligible. And there were some home users, although most preferred Apple. So IBM didn't invent the PC. IBM invented mass marketing for its own brand of PC. And also - after a while - IBM started the constant upgrade treadmill. S-100 was more backward looking. You could get 8086 and 68000 cards for S100, but it was really a Z80 ecosystem. There was no clean upgrade path with backward compatibility. This was a showstopper for most businesses, which needed access to old data and software. IBM screwed themselves by hugely overcharging for PS/2, and Compaq stole their lunch. As soon as other clones appeared IBM were out.
  - analog31 5y ago
    Award BIOS was probably a huge game changer. Knowing the contents of BIOS wasn't enough, after Franklin lost their lawsuit with Apple. Someone had to come up with a functional equivalent. A third party BIOS meant that anybody could crank out a machine.

MrRadar 5y ago

No mention of the PS/2 and Micro Channel Architecture? MCA was IBM's attempt to put the genie back in the bottle and redefine the PC back to being something they wholly controlled, and it utterly failed. It also didn't help that they were late to the market with 386-based computers (Compaq having beaten them to the punch with the Deskpro 386) which already signaled they were losing their market leadership position that allowed them to define the PC platform. In response to MCA, the PC industry formed an independent consortium to define the EISA bus and later Intel itself eventually took over as the de facto standards originator for PCs by developing PCI, USB, ATX, ACPI, AC'97/HD Audio, (U)EFI, and a large part of the other foundational standards on which modern PCs are built.

CurtHagenlocher 5y ago
PS/2s were overpriced and underpowered, and people I knew told me that a surprisingly high percentage of them arrived DoA. That was basically the end of "no one ever got fired for buying IBM".
city41 5y ago
According to this video[1], Compaq's portable also bested IBM. It was Compaq's first product, and everyone thought IBM's upcoming portable would wipe them out, but they held strong and counted on IBM to have production problems, which they did, so Compaq held onto this segment. [1] https://www.youtube.com/watch?v=HEMhpInIACk https://www.youtube.com/watch?v=HEMhpInIACk
- northwest65 5y ago
  So handy for pirating software at PCCUG meetings.
D13Fd 5y ago
They did talk in the article about how slow IBM was to adopt the 386.
- protomyth 5y ago

CurtHagenlocher 5y ago

"OS/2 finally came out in late 1987, priced at $340, plus $2,000 for additional memory to run it. By then, Windows had been on the market for two years and was proving hugely popular." No. Windows was basically irrelevant until 3.0 came out in 1990.

midasuni 5y ago
Yes, it was dos and lotus123 and maybe word perfect that were popular in the 80s.
- anyfoo 5y ago
  Not contradicting, just adding that MS Word for DOS was also somewhat popular.
- wombatmobile 5y ago
  Yes. Personal Computers were typewriters and calculators for the first 10 years. That's not to diminish their importance - quite the opposite. The impact changed the world. That's why it took a whole decade. Consider that when the IBM PC was launched, offices the world over had typing pools populated by women whose job it was to type whatever they were given. Spreadsheets changed the world. We went from 1 or 2 types of tuna and 1 or 2 types of olive oil in the supermarket to dozens of each. Why? How? The big enabler was Lotus 1-2-3. Product managers in food companies could manage the ingredients, inventory, branding, marketing and sales performance of dozens of products at a time instead of just one or two. The spreadsheet was a fancy calculator, in the same way that a machine gun is a fancy pistol, and a combine harvester is a fancy hoe. The first decade of personal computers enabled office work to scale, and it reconfigured literacy by enabling individuals to type letters when they felt like it. The fax machine was right there alongside, like the hammer and the sickle of capitalism. The resulting boost to productivity touched every industry the world over.
SavantIdiot 5y ago
I'd go so far and say irrelevant until Windows for Workgroups 3.11. That's when Banyan Vines + Ethernet (as opposed to token ring) + Lotus (ccMail & 123) really started to take over corporate America.

Trias11 5y ago

I still remember the nonsense cost of IBM PS/2 i386 for like $14,000-$21,000. IBM approached PC revolution with a dinosauric mainframe mindset and that killed it. For them.

SavantIdiot 5y ago
I still remember ~1985 paying $1,000 for 512KB of DRAM from suppliers listed in the back of Computer Shopper. Even clones were very expensive then, but not PS2 expensive.

Liambp 5y ago

If you have any interest in the origins of the personal computer you should track down the sublime documentary series "Triumph of the Nerds" by Bob Cringely. You an find various versions on Youtube.

laumars 5y ago
Also I’d recommend ‘Pirates of Silicon Valley’ and ‘Silicon Cowboys’

howmayiannoyyou 5y ago

Lenovo bought IBM's PC business for $1.75 billion in 2004, or about $2.51 billion adjusted for inflation. Lenovo's PC and smart device sales hit a record 12.4 billion in its FY2020, mostly due to Windows-based PCs. I would argue that had IBM ceded software to Microsoft, and had it focused on hardware and PowerPC chip compatibility, the company could have greatly improved on the 20% margins that were the impetus for selling its PC business to Lenovo.

protomyth 5y ago
They wanted access to China and Lenovo gave that to them.

blueyes 5y ago

I highly recommend Charles Ferguson's "Computer Wars" on this topic, as well as his other book (about startups and the early Web), "High Stakes, No Prisoners."

FullyFunctional 5y ago

I remember when IBM launched the PC and it looked ludicrously overpriced and lacking in "modern" features (like graphics and sound). I didn't buy one for myself until the 386 came out. The article's claim about "IBM’s strategic error in not retaining rights to the operating system" begs the question if the PC revolution would have happened had Microsoft not owned it. I personally doubt it. While IBM had success up to the IBM AT, there really wasn't much revolutionary about them and they were stupidly expensive. The clones really made the PC a success. It's just tragic that the crap SW and HW won the market.

jandrese 5y ago
It's a classic worse is better scenario. https://en.wikipedia.org/wiki/Worse_is_better https://en.wikipedia.org/wiki/Worse_is_better
flyinghamster 5y ago
But for short-sightedness at DEC and Xerox, things might have been different indeed. Unfortunately, DEC hamstrung their micros until it was too late, and Xerox's pie-in-the-sky machines at PARC were expensive enough that their real-world offering was the 820, a me-too 8-bit CP/M system that came out just in time to be stomped by the PC.
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AnimalMuppet 5y ago
> The clones really made the PC a success. Yes. Price competition is a wonderful thing. They undercut IBM's pricing model. IBM tried to get it back with the PS/2, which was patent protected. But that totally missed the point. > It's just tragic that the crap SW and HW won the market. Crap SW and HW made the market. There wasn't much of a market for PCs at the PS/2 price point. There was a much larger market at the PC clone price point. (I'd guess that halving the price led to something like 10 times the volume. The PS/2 was locked out of any meaningful volume just by the price.) General rule: The PC I can afford is better than the PC I can't. Sure, it may be technically inferior. Doesn't matter. The one I can't afford has zero utility for me, so the one I can afford is actually better (for me), no matter how crap it is. The other thing that made that market was the clone vendors cooperating to define the EISA bus standard. It created a huge market (all the clone companies put together) for peripherals. And because you could get anything in an EISA peripheral, that created a huge market for EISA PCs. It was mutually reinforcing to create an exploding market. If they had fought each other with competing bus standards, that would have killed the market.

brian_cunnie 5y ago

I worked at IBM, '91 - '93, in the PC Business, in the sales channel. We had a couple of problems that IBM's competitors didn't have. For one thing, we couldn't make too powerful a PC that might cannibalize the minicomputer sales (AS/400). IBM made much more money on an AS/400 than a PS/2 model 95. Our cost structure was too high. How high? We lost $1 for every $100 we sold. Part of the reason the cost structure was high were the number of IBM'ers: I worked in an office of about 15 people supporting the NY/Long Island region. Four years later, it was down to 1 person. Another reason was our physical costs were high. For example, we couldn't buy RAM from Intel; we had to buy RAM from IBM (which was fabbed in Kingston, NY, not to be confused with the Kingston RAM mfr). Also, we were struggling to get the correct mix of sales channels. For example, we couldn't sell PCs directly through the IBM sales force (too expensive, IIRC it added 36% to the sales cost). Instead, the IBM sales force would partner with dealerships (which added 21% to the sales cost). The web didn't exist yet, not really, so we couldn't sell through there. We could have done direct-response (an 800 number, like Dell & Gateway were doing), but that took a while to spin up. And it was similar in cost to selling through dealerships. Also we didn't sell through distributors, which was the least-expensive channel (16% IIRC). I remember looking at the price list. We had two levels of dealers: those who bought large volumes, which typically purchased equipment at 30% off list, and those who worked in smaller quantities, which would get ~20% off list. As the PC Market became more competitive, we couldn't afford high list prices (we were too expensive), so one of the ways we brought down our list prices was to shrink the discount we gave to the dealers. The dealer was not allowed to sell online or via computer magazines: there had to be in-person contact. That helped prevent the Atlanta dealers from poaching the NYC dealers' business. It's easy to armchair-quarterback the decisions IBM made, but a lot of those decisions were nuanced. For example, you could say, "Why didn't IBM have an 800 number to buy PCs?". And the answer is that a lot of our biggest customers were corporations, not individual consumers, and they felt more comfortable purchasing through a dealer they trusted.

jandrese 5y ago
This is a classic case of a business losing a market because they didn't want to let go of a dying but profitable business. The market always wins in the long run. Don't feel sad. This market dynamic is how startups can get ahead. Otherwise everything would be dominated by the huge incumbents forever.

orionblastar 5y ago

Microsoft stabbed IBM in the back with licensing DOS to OEMs and bundling Windows and Office with each OEM PC sold while IBM had OS/2 Microsoft had Windows NT.

sam0x17 5y ago

Side note, there are a LOT of die-hard Thinkpad fans, myself included. Sadly it just hasn't been the same since Lenovo took over. I literally grew up playing Counter-Strike Source with the little red dot.

kilroy123 5y ago
Yup, I loved my Thinkpads back in the 2000s. It just never was the same with Lenovo. After 2010, I completely lost interest and moved away to Apple and using a MacBook.
- sam0x17 5y ago
  I was always running Linux on my thinkpads, and still happily doing so on the latest Asus G14 :)
  - kilroy123 5y ago
    I always ran Linux as well.
chaoticmass 5y ago
I've got a smallish collection of old IBM ThinkPads I hold on to (most of them with the matching laptop bag). Models include: 701C, 380XD, 380Z, 600X, 770Z, T42P, T43P, X41t. Running Linux on all of them except the T42P, 380XD, and 380Z. Oddly enough, my current 'laptop' is the Lenovo X1 Tablet, probably the least IBM-like ThinkPad ever (it's like a Microsoft Surface). I just really like the form factor, and unlike the surface, you can take it apart and replace the battery. With thunderbolt, I run an eGPU for light gaming and video editing.

pjmlp 5y ago

No mention that PC clones happened only because IBM could not prevent Compaq's reverse enginneering trick to give birth to PC clones?

graycat 5y ago

Yes, I was in IBM, some AI in their Research Division, from 1985 to 1993 when IBM had a big crash. Maybe an old idea I had about PCs has some insight: The idea is that for several years into the rise of the PC, the base, solid as concrete, fundamental, economic productivity reason for the PC was to kill off the typewriters, that is, word processing; as one guy put it, "capture the key strokes". The typewriters didn't "capture the keystrokes" and, thus, were a huge economic waste. Next in line was spreadsheets. Now the biggie? Okay, replace TVs. We've already essentially replaced newspapers printed on paper; and PDF is replacing a lot of books printed on paper. The future? See a problem that in terms of economic productivity needs solving, and get one or a few PCs and solve it. How? There is nearly no limit on the new problems to be solved or the new means of solution.